CHANGES TO ARBITRATION IN CHINA - ENFORCEMENT OF THE NEW CIETAC RULES

Since April 2012, a heated dispute has raged between the China International Economic and Trade Arbitration Commission (CIETAC), the CIETAC Shanghai Sub-commission (CIETAC Shanghai) and CIETAC South China Sub-commission (CIETAC South China). The internal division and disagreement between the organisations has intensified over the course of time and the nature of the dispute has served to bring about confusion and uncertainty over the future of arbitration across the country.

CIETAC dominance

Since its inception in 1956, CIETAC has been the foremost, undisputed arbitral institution in China. However, in 2012, with arbitration becoming increasingly popular, not only in China but globally, CIETAC found its caseload increasing exponentially. To cope with the influx of cases, particularly those cases with a foreign dimension, and to improve the organisation’s arbitrational procedures, CIETAC introduced a revised set or arbitration rules which came into effect in May 2012, seven years after the last set of revisions. The 2012 rules were introduced with the aim of addressing the increasing complexity of contemporary arbitration proceedings, to provide a greater degree of autonomy to parties and to codify and clarify the commission’s existing practice. The changes were also designed to ensure that CIETAC remained competitive in an increasingly global ADR market.

CIETAC’s amendments were designed to help internationalise arbitration in China, making it possible for parties to specify a seat outside of China for the first time, although this was only applicable to disputes that were ‘foreign related’. Furthermore, the 2012 rules stipulated that Chinese need no longer be considered the default language of the arbitration if the parties had not expressly agreed on language.